GENERAL COMMENTS:
Strong triple-digit gains in feeder cattle futures Monday morning is helping to stimulate additional strong support across the entire complex. Gains of nearly $4 per cwt are seen late morning in most nearby feeder cattle trade, which is helping to add to the support in live cattle futures. Most of the trade activity for the week in futures activity is likely to be done through the first half of the week as the upcoming Christmas weekend typically starts eroding trade interest and volume the closer to the holiday.
The December cattle on feed report and quarterly hogs and pigs report will also be released Friday following market close. There will be some anticipation to the direction of these reports, but given the timing, markets will not be able to trade these reports until next Tuesday after the Christmas holiday, leaving some uncertainty to how much of focus will be on pre-adjustments or significantly delayed report shifts due to expected sluggish holiday trade.
March corn is down 4 3/4 at $4.783 and January soybean meal is up $5.00 at $410.6. The Dow Jones Industrial Average is up 36.83 at 37,341.99.
LIVE CATTLE:
Live cattle futures have followed feeder cattle futures higher Monday morning. Even though the live cattle futures contracts have continued to be directed by the lighter traded feeder cattle market over the past couple of months, it is important to keep in mind that traditionally this has not been the case.
February live cattle futures contracts continues to have five times the open interest of the most active feeder cattle contract, which is typically the case in the cattle complex. However, the uncertainty of overall cattle placements over the last few months has tipped the scales to focus on longer-term cattle supplies instead of currently available beef access.
Cash cattle markets are quiet once again Monday morning following weaker trade last week. Asking prices and bids are unavailable and may be sluggish until midweek or later. However, the growing support through the complex is creating optimism by feeders for steady to higher money going into Christmas weekend.
December live cattle are $1.30 higher at $169.525, February live cattle are $1.23 higher at $170.575, April live cattle are $1.53 higher at $174.375.
Boxed beef prices are mixed: choice down $2.56 ($289.08) and select up $2.47 ($263.29) with a movement of 55.54 loads (39.03 loads of choice, 13.61 loads of select, zero loads of trim and 2.90 loads of ground beef).
FEEDER CATTLE:
Sharp gains are seen in feeder cattle trade Monday morning with prices hovering between $3 and $4 per cwt through most of the morning. The underlying support redeveloping in not only the feeder cattle complex, but all cattle markets is helping to bring follow-through buyer activity to the market, which, until now, has been generally hesitant to get involved. The ability to close price levels at current levels or higher should spark some additional market momentum as the week continues. However, trade volume is also expected to become more limited the closer to the Christmas weekend we get, allowing for the potential for some moderate to wide price swings based solely on pre-holiday position adjustments.
January feeders are $3.68 higher at $224.575, March feeders are $3.63 higher at $225.8 and April feeders are $3.68 higher at $230.25.
LEAN HOGS:
Lean hog futures have not seen the market optimism developing in the cattle complex. Mixed trade within a narrow to moderate range is seen through the entire complex, with the most pressure seen in spot February contracts. Given the strong rally last week, a portion of the market pullback is typical position shifting, but there remains uncertainty as to just how much domestic and export support for pork products will be seen over the next couple of weeks.
February lean hogs are $0.60 lower at $71.3, April lean hogs are $0.48 lower at $78.15 and May lean hogs are $0.10 lower at $84.60. Hog Prices are higher on the Daily Direct Morning Hog report, up $0.98 with a weighted average of $49.41, ranging from $40.00 to $54.00 on 1,382 head with a five-day rolling average of $49.57. Pork Cutouts totaled 144.92 loads with 116.26 loads of pork cuts and 28.66 loads of trim. Pork cutout values are up $1.51 at $84.53.
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